Standard form of Contract for Engineering, Procurement and Construction (EPC) Projects in Oil and Gas industry has not gained the favor. Most of the NOCs/IOCs (National Oil Companies / International Oil Companies) prefer to use standalone bespoke EPC Contracts often based on in-house expertise that is developed from using the contents of different standard forms of Contract. This requires a lot of care during the drafting and several rounds of lengthy instructive discussions during the tendering. This paper discusses whether the use of Second Edition of FIDIC Form of Silver Book or Yellow Book released in December 2017 is possible as acceptable standard form of Contract for Oil and Gas Industry with the use of Particular condition to address the special requirements of a Project.
The EPC Contracts for onshore and offshore oil and gas projects are generally experiences the issues related to deficient scope definition, force majeure, performance related issues, indemnity, insurance provisions, change orders, termination, limitation of liability, no damage for delay etc. Second edition of FIDIC rainbow suite has striven hard to address the above stated issues with balance distribution of the risk.
The 2017 FIDIC Form of Contracts provides increased reciprocity between the Parties (i.e. Employer and Contractor) with an emphasis on notices and time bar provisions. Further, use of standard form of contracts such as FIDIC facilitates better understanding of the risks distribution at the outset of contract due to availability of precedence and accepted explanation of ‘terms and conditions of Contract’.